“Antitrust’s Least Glorious Hour”: The Robinson-Patman Act

Abstract

In The Antitrust Paradox, Robert Bork explored many of antitrust's misadventures. Specifically, Bork severely criticized the Robinson-Patman Act, which he characterized as "antitrust's least glorious hour." In this paper, we explore Bork's criticism of the Robinson-Patman Act along with those of other legal scholars and economists. We analyze the central prohibitions of the act and explore their competitive implications. We also show that the act's unfortunate prohibitions have been muted by the antitrust agencies' benign neglect and three recent Supreme Court decisions.

Ethical and legal considerations of artificial intelligence and algorithmic decision-making in personalized pricing

“…§ 13(a)). Consequently, the phenomenon considered by the Act is not price discrimination, but rather, price differenceand it fails to consider those legitimate price differentials wholesalers may offer to their customers that in turn drive lower prices for consumers (Blair and DePasquale 2014). A novel empirical study of court cases involving consideration of the Robinson-Patman Act was conducted by Bulmash (2012) demonstrating how complainants in "secondary line" injury cases (purchasers of price-discriminated goods operating in a resale context) result in coordinated competition among suppliers, harming both consumers and competition.…”

The Robinson–Patman Act and Vertical Relationships

“…Inconsistencies in the RPA are well‐known among antitrust lawyers, economists, and legislators. In fact, President Reagan's failed Supreme Court nominee, Robert Bork, famously described the RPA in his book, The Antitrust Paradox, as “the most inglorious hour” for antitrust legislation due to the very real potential that it could be achieving the exact opposite result that was intended (Blair and DePasquale 2014). Legislators are also well aware of its weaknesses as representatives of both houses of Congress and the George W. Bush administration explicitly called for its repeal in 2007 (Antitrust Modernization Commission 2007, 20).…”

“…Evidence shows the RPA is no longer strictly enforced. While the Federal Trade Commission (FTC) issued 758 cease‐and‐desist orders from 1960 to 1972, there were only two between 1996 and 2016 (Scherer and Ross 1990; Antitrust Modernization Commission 2007; Blair and DePasquale 2014). In private lawsuits, on the other hand, plaintiffs won in only 5% of RPA cases from 2006 to 2010 compared with 35% from 1982 to 1993 (Luchs et al 2010).…”

Agribusiness and policy failures

“…Targeting specific forms of conduct ends up directing firm behavior in ways that are not likely to serve the broader intent of antitrust law, which is to protect consumers. In the case of the RPA, targeting wholesale prices instead of retail‐wholesale margins means that we essentially protect inefficient firms (Blair & DePasquale, 2014). In the retail food setting that I am most concerned with, strict enforcement of the RPA would mean that Walmart, which enjoyed clear supply chain efficiency advantages over the past 30 years, would not be allowed to use these efficiencies to provide lower retail prices to consumers.…”